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Since reporting third-quarter results on Nov. 9, Plug Power (NASDAQ:PLUG) stock has been volatile, trading in a 20% range.
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The share price has been as low as $39, and as high as $45, as investors balance losses and growth with the promise of the “green hydrogen” market.
For the three months ending in September, Plug Power lost $106 million, 19 cents per share, on revenue of $144 million. A year earlier it lost $65 million, 18 cents per share, on revenue of $107 million.
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Revenue grew 34%, but losses also grew from 60% of revenue to almost 74%. The loss would have been worse except for sales of new stock. Yet shares are up 4.5% over where they were when earnings were announced, thanks mainly to the promise of “green” hydrogen.
A Closer Look at PLUG Stock
Hydrogen doesn’t really come in multiple colors. It’s just defined that way for market purposes.
“Blue” hydrogen uses natural gas as a feedstock. Green hydrogen uses electricity to split water molecules into its constituent atoms, which are oxygen and hydrogen.
Hydrogen is used in fuel cells to deliver power by reversing the green hydrogen process. Hydrogen in the fuel cell combines with oxygen in the air, creating electricity with water as the byproduct.
Plug Power began by making these fuel cells mainly for forklifts in warehouses. Hydrogen beats electricity in warehouses for range and both beat fossil fuels for cleanliness.
Plug Power decided last year to focus on becoming a green hydrogen supplier, starting with an Olin (NYSE:OLN) Chlor-alkali plant in Tennessee.
The Olin plant was already separating water, using electrolysis, to create caustic soda and chlorine from brine. A Plug Power acquisition called United Hydrogen was able to collect the hydrogen, while another new unit called Giner ELX could sell it.
This year, Plug Power is taking its green hydrogen ideas global. It has a partnership to create plants in Europe. It’s building a plant in Australia. It’s also building a fuel cell manufacturing plant in New York state.
TV analyst Jim Cramer has called the environmental trend represented by Plug Power “unstoppable.”
Green Versus Blue Hydrogen
Analysts are also arguing about green and blue regarding Plug Power, but this argument involves whether to invest green money or feel blue about its prospects.
Citigroup (NYSE:C) recently promoted a trade to buy Plug Power while shorting a competitor, Ballard Systems (NASDAQ:BLDP). This helped give Plug Power its post-earnings gain.